Maurer School of Law: Indiana University
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Theses and Dissertations Student Scholarship
10-2016
A Comparative Law Perspective on Intermediaries'
Direct Liability in Cloud Computing Context -- A
Proposal for China
Shi Xu
Indiana University Maurer School of Law, [email protected]
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Recommended Citation
Xu, Shi, "A Comparative Law Perspective on Intermediaries' Direct Liability in Cloud Computing Context -- A Proposal for China" (2016).Theses and Dissertations.Paper 32.
A COMPARATIVE LAW PERSPECTIVE ON
INTERMEDIARIES’ DIRECT LIABILITY IN
CLOUD COMPUTING CONTEXT—A PROPOSAL
FOR CHINA
SHI XU
Submitted to the faculty of Indiana University Maurer School of Law in partial fulfillment of the requirements
for the degree Doctor of Juridical Science
DEDICATION
To my beloved Dad and Mom,
Mr. Xu Wenguang and Mrs. Liu Li.
I love you deeply in my heart.
ACKNOWLEDGEMENT
I want to express my sincere gratitude to my advisor, Prof. Leaffer. I
want to thank him for his valuable guidance, consultation, supports and
patience. I also want to thank my dissertation committee members,
Prof. Mark Janis and Prof. Michael Mattioli, for their valuable guidance
and comments on my dissertation.
I want thank Prof. Lisa Farnsworth, Dean Lesley Davis, Mrs. Allison
Foust and Mrs Lara Gose. Thanks so much for being so nice to me. They
always encourage and support me to overcome obstacles. I’m so
honored to be one of the Graduate Legal Study Office.
Thanks to Mr. Li who helped me a lot with editing my dissertation.
Most importantly, I want to thank my parents and grandmother for
giving me all their support and love during my whole life. Thanks to my
grandfather, you will live in my heart forever.
Thanks to all, for my great experiences of finishing my LLM-‐Thesis and
SJD degree.
ABSTRACT
This dissertation is motivated by two questions: How does the emergence of cloud-‐ computing technology impact major countries’ copyright law regarding the issue of intermediaries’ direct liability? What should Chinese legislature body learn from those countries regarding this issue? Answering the first question lays a foundation for answering the second question.
Usually, a cloud-‐computing intermediary’s specific activity may possess risk of violating a copyright holder’s right of reproduction, right of communication to the public and right of distribution. Comparatively, that intermediary can raise defenses under the exhaustion doctrine and the fair use doctrine. Analysis on these two topics consists of two parts. The first part examines copyright law in major countries or regional organizations such as the U.S., Japan or the European Union. The second part is an analysis of current related Chinese legislation and a proposal for China. This dissertation examines relevant international copyright treaties, major countries’ related legislature documents and related cases.
This dissertation offers a thorough legal analysis how cloud-‐computing technology affects copyright worldwide. The proposal at the end consists of two parts. The first part provides four general legislature advices for China. The second part focuses on how China’s legislature should adjust copyright owner’s exclusive rights and intermediaries’ defense theories to react the impact brought by the cloud-‐ computing technology.
TABLE OF CONTENT
CHAPTER 1: INTRODUCTION 1
CHAPTER 2: DEFINING CLOUD COMPUTING 7 CHAPTER 3: INTERMEDIARIES’ DIRECT LIABILITY OF COPYRIGHT
INFRINGEMENTS 13
I. Infringe the Right of Reproduction 13 i. THE U.S. PART— From the Case Law Relevant to The Right of Reproduction 15 A. Before the RAM Copy Doctrine: Elektra v. Gem, Basic Book v. Kinko’s AND
Priceton University v. Michigan Document Service 16
B. MAI v. Peak --- the RAM Copy Doctrine 18
C. Religious v. Netcom -- An Limitation Attempt: “Volitional Vonduct” 22 D. DMCA’s Amendments— Exceptions to the RAM Copy Doctrine 23 E. CoStar Group, Inc. v. LoopNet, Inc.—Qualitative/Quantitative Components of
Fixation’s Transitory Duration Requirement 24
F. Cablevision case—Introduced Transitory Duration Requirement Besides the
RAM Copy Doctrine 25
G. Flava Works. Inc. v. Gunter.—Implicitly Reject the RAM Copy Doctrine 30
H. Capital Records, LLC v. ReDigi Inc. 31
ii. The EU part 36
A. EU Copyright Law’s Revolution 36
B. EU Directives and ECJ’s Judgments 39
a. Computer Program Directive (Software Directive) 39
b. Rental and Lending Directive 40
c. Database Directive 41
d. Information Society Directive 42
e. Satellite and Cable Directive 48
C. UK 49
A. Singapore 51
B. Australia 53
C. Japan 57
iv. How Cloud Computing Effect the Reproduction Right? – A proposal for China 62
A. How Cloud Computing Effect the Reproduction Right? 63
a. When there’s a Deduplication Process, Who Makes the Copy? 64 b. Is there a “copy” being created?—When “Streaming” a video or audio from
the cloud. 67
B. The Right of Reproduction and a Proposal for China 72 II. Infringe the Right of Communication to the Public 79
i. The U.S. Part 82
A. In 1976 Revised Copyright Act 84
B. Single Copy requirement of Transmit Clause—Redd Horne case, On
Command case, Nimmer’s suggestion and Cablevision II 86
C. Zediva, FilmOn X and Aereo Case 89
D. MP3tunes Case 98
ii. The EU Part 101
A. Rental and Lending Directive 102
B. Satellite and Cable Directive 106
C. Database Directive 106
D. Information Society Directive 107
a. The Right of Communication to the Public 108 b. The Right of Making Available to the Public 110
c. The Definition of “Public” 113
iii. Other Countries 124
A. Singapore-‐ The Right of Communication to the Public 124
B. Japan— Public Transmission Right 130
C. Australia— the Right to Communicate to the Public 137 iv. How Cloud Computing Affect the Right of Communication to the Public?— A
A. What constitute “public”?— Deduplication Technology 144 B. Who is communicating?— the Users or ISPs? 145 C. The Right of Dissemination on Information Networks and a Proposal in
China 146
a. Does The Right of Dissemination on Information Networks Regulate
“Non-‐Interactive Communication?” 148
b. How To Define “Provide?” 151
c. Who Provides the Works? 159
d. A Proposal for China 161
III. Infringe the Right of Distribution 162
i. The U.S. Part 164
A. Digital Distribution 165
B. Distributive Principle—Evidence Required to Establish Distribution 168
a. The “Actual Distribution” Requirement 169
b. The “Making Available” Requirement 176
C. Who Infringe the Distribution Right? 181
ii. The Right of Distribution in EU 184
A. Is There A Digital Distribution Under EU’s The Right Of Distribution? 185 B. Questions Arouse With Regulating Digital Distribution By The Right Of
Distribution 188
iii. The Right of Distribution in Other Countries 190
A. Singapore 190
B. Australia 191
C. Japan 193
iv. How Cloud Computing Affect the right of Distribution?— A Proposal for China 194
A. Digital distribution or not? 195
B. The Right of Distribution and A Proposal for China 196 a. The definition of distribution in Chinese law and its three key
b. Could the right of distribution in China regulate digital distribution? 199
c. A proposal for China 205
CHAPTER 4 : INTERMEDIARIES’ POTENTIAL DEFENSE 208
I. Exhaustion Doctrine (First Sale Doctrine) 208
i. The U.S. Part—The First Sale Doctrine 210
A. What is the First Sale Doctrine? 212
B. Is it License or Sale? 213
C. Could the First Sale Doctrine Be Applied to the Digital World? 219 a. The ReDigi Case and Reasons for not Extending the First Sale Doctrine to
the Digital Transmission 219
b. But, Why Not? 223
ii. The E.U. Part— the Exhaustion Doctrine 227
A. What Constitutes a “Sale”? 229
B. Should the E.U. Exhaustion Doctrine Encompass Digital Transmissions? 231
C. Limitations on ECJ’s conclusion 234
iii. The Exhaustion Doctrine in Other Countries 236
A. Singapore 236
B. Australia 238
C. Japan 240
v. How could Cloud Computing Affect the Exhaustion Doctrine and A Proposal
for China. 242
A. The Affection of Cloud Computing towards the Exhaustion Doctrine 243 B. China’s Situation and A Proposal for China 245
II. Fair Use—Legal Exceptions or Limitations 249
i. The U.S. Part—Fair Use 251
A. Productive Use (Transformative Use) Theory in the Preamble 252
B. Four Criteria of the Fair Use Doctrine 256
C. Napster Case, ReDigi Case and Google books Case – Application of the Fair
ii. The E.U. Part—Limitations and Exceptions 263 A. Limitations and Exceptions in the Software Directive 263 B. Limitations and Exceptions in the Information Society Directive 264
iii. Other Countries 275
A. Singapore 275
B. Australia 277
C. Japan 282
iv. A Proposal for China to deal with fair use exception under cloud computing
context 286
A. Exceptions or Limitations to Copyright under Cloud Computing Context.286 B. Chinese Limitation List and A Proposal for China 288
a. China’s Limitation List 289
b. The General Guideline for Applying The Limitations List 291 c. There Is An Existing Limitations List To The Information Network 292
d. A Proposal For China 294
CHAPTER 5: CONCLUSION 296
Chapter 1: Introduction
In the last two decades, the increasing digitization of copyrighted content and the growth of Internet created lots of challenges to copyright law area. For instance, copyrighted works’ digital copies’ quality was approaching a near-‐perfect condition, which leads to copyright infringements become easy and cheap by making unlawful digital copies of copyrighted works. Data transmission and storage technologies were also thoroughly reformed, which resulted in a spread of both authorized and unauthorized copies of copyrighted work. 1
Public users increasingly demand storing, transmitting, accessing and sharing digital content via the Internet at anytime and anywhere with less cost. Emerging of Cloud computing technology then satisfies public users’ growing need. Cloud computing is a broad term in describing a kind of technology services through the Internet. It is a general term for the numerous of protocols, applications and transmission techniques users can use to store, process, manage and stream data via remote servers—which often controlled by third party providers.(Hereafter ISPs)2 Cloud computing technology provides convenient, easy operated, less-‐expensive but more-‐expansive service. For instance, after drafting a document by “Microsoft Word,” one could directly save that file in OneDrive, a cloud service also provided by
1 Viktor Mayer-‐Schönberger, DELETE: THE VIRTUE OF FORGETTING IN THE DIGITAL AGE, 52-‐62
(2009); See also Marc Aaron Melzer, Copyright Enforcement in the Cloud, 21 FORDHAM INTELL.
PROP. MEDIA & ENT. L.J.403, 403-‐04 (2011).
Microsoft.3 One can also directly store photos in iCloud, which is another cloud service provided by Apple.4 Common users are also getting used to watch TV programs on computers or other devices instead of televisions. There’s no need for them to follow the TV programs’ schedule or have to purchase a cable system, they just need access to the Internet buffering by the cloud computing technology. All they need to do is clicking a single button and then enjoying the streaming video/audio contents even without downloading. Cloud computing service is changing people’s daily life silently but drastically.
However, emergence of cloud computing services actually mounted the existing challenges to copyright law and created even more legal loopholes. For instance, through the cloud streaming service, users can enjoy music, TV programs or movies before the entire file being transmitted to users’ computers. This process will create temporary copies of the streaming works in the cloud server or in the RAM of end user’s computer. Thus ISPs may be under the risk of directly infringing the streaming copyrighted works’ right of reproduction by creating such temporary copies since the existing copyright laws around the world have not contoured the scope of protected copies. Further, a new used market for digital files is generated
3 OneDrive, WIKIPEDIA.ORG, available at https://en.wikipedia.org/wiki/OneDrive (“OneDrive
(previously SkyDrive, Windows Live SkyDrive, and Windows Live Folders) is a file hosting service that allows users to sync files and later access them from a web browser or mobile device. Users can share files publicly or with their contacts; publicly shared files do not require a Microsoft account to access them.”)
4 iCloud, WIKIPEDIA.ORG, available at https://en.wikipedia.org/wiki/ICloud (“The service
provides its users with means to store data such as documents, photos, and music on remote servers for download to iOS, Macintosh or Windows devices, to share and send data to other users, and to manage their Apple devices if lost or stolen. The service also provides the means to wirelessly back up iOS devices directly to iCloud, instead of being reliant on manual backups to a host Mac or Windows computer using iTunes.”)
by the ISPs because of the expansion of cloud computing software such as ReDigi allowing consumers resell their “used” copyrighted works which were uploaded to their cloud lockers by digital distribution.5 This market caused new challenges, especially regarding the application of the first sale doctrine (exhaustion doctrine) and the fair use doctrine. The appearance of this second hand market is inevitable, because people are getting used to purchase digital music recordings or e-‐books online. It’s important for the law to keep up with the development of technology, especially in the field of copyright law. A new proposal for copyright law must be considered as soon as possible.
Copyright owners will definitely protect their interests via lawsuits where copyright infringements exist—when users upload, stream or share the videos, music or e-‐books via the cloud service provided by ISPs. Individuals are difficult to identify or located, so that it is not easy for copyright owners to file lawsuits against them. There’s no doubt that a big war between copyright owners and ISPs had already begun, for instance, the U.S. ReDigi Case. All countries that involved in the Internet world are currently involving or going to involve in this war. And this war will not be settled easily, because the current statutes in all countries are not clear enough in solving the issues of copyright infringement. Thus, clarification of the relevant legal uncertainties is necessary in ending the war between copyright owners and ISPs.
5 ReDigi, WIKIPEDIA.ORG, available at https://en.wikipedia.org/wiki/ReDigi (“ReDigi is an
online marketplace for pre-‐owned digital music and the only cloud storage service that verifies whether each music file uploaded for storage was legally acquired from an eligible source.”)
There’s no doubt that China is also drifting in the war between copyright owners and ISPs. There are lots of cloud-‐based services in China that actually are infusing in people’s daily life. For instance, NetEase music, which is a cloud-‐based music locker, enables users to stream music files without downloading simply via devices as mobile phones through the Internet.6 Baidu Cloud or Sina vdisk provides storing, sharing and other functions online.7 Under the existing Chinese Copyright Act, there are also too many legal uncertainties in deciding copyright infringements relevant to the cloud services due to the legislature vacancy regarding this issue. For example, when apply the right of dissemination to information networks (the right of communication to the public), Chinese literature currently holds two standards to decide whether there’s an act of providing files, the server standard and the users’ perception standard. However, the Chinese Copyright Law does not provide a clear guideline for this issue, and thus such legislature vacancy result in courts’ different decisions based on similar facts. Further, Chinese ISPs may not only face domestic copyright owners’ accusation but also International copyright owners’, since numerous people are enjoying free foreign countries’ TV programs, movies or e-‐ books simply via the Chinese cloud services. All in all, it’s necessary to provide a reasonable proposal for China to cope with these existing and potential copyright challenges.
In order to solve the challenges and fill legal loopholes brought by cloud computing technology, this dissertation will identify problem arising from
6 Andrew Godinez, The Free Service That Will Get You To Leave Spotify, (2015)
http://android.wonderhowto.com/how-‐to/netease-‐music-‐free-‐service-‐will-‐get-‐you-‐leave-‐ spotify-‐0162417/ (last visited Aug 12,2016).
enforcement of copyright in this cloud computing era, describe the present viability of major countries’ copyright law enforcement through analyzing recent copyright cases, and discuss viable solutions regarding this issue proposed by major countries. This dissertation will take the U.S., EU and other countries as examples, then connect the former discussion with the specific situation (such as traditional culture of Sharing) in China. Finally, this dissertation will try to make a reasonable proposal for copyright law legislation for the facing cloud computing technology’s China in the end.
Chapter 2 will present general idea of cloud computing technology. What is the different kinds of business models using this technology such as music locker service (iTunes), video sharing service (Youtube) and provide background information on these similar services. How it relates to our daily life.
Chapter 3 will analyze the ISPs’ direct liabilities. When using the cloud computing technology, the ISPs are under the risk of infringing the copyright owner’s right of reproduction, the right of communication to the public and the right of distribution because of the application of cloud computing service. This chapter will illustrate traditional definition and the common applications of these three exclusive rights by analyzing statutes and cases from various countries, then analyze how cloud computing may affect them in those countries. This chapter will eventually provide the author’s proposals for China.
In Chapter 4, I will discuss ISPs’ potential defenses when facing direct copyright infringements: the first sale doctrine (exhaustion doctrine) and the fair use doctrine. As the same of chapter 3, this chapter will also first analyze statutes
and typical cases in the U.S., EU and other countries and come up with a potential proposal for China based on the Chinese specific situation.
Finally, chapter 5 will generate a proposal for copyright legislation regarding cloud computing based on former summaries for China.
Chapter 2: Defining Cloud Computing
Cloud computing technology refers to approaches to diffuse computing power across more that one physical computer.8 With the use of cloud computing, the boundaries of computing will be determined by economic rationale rather than technical limits alone. The name of “cloud computing” was derived from telecommunications companies who changed their services from point-‐to-‐point circuits to Virtual Private Networks in the 1990s.9 Thus, it’s clear that cloud computing is based on the virtualization technology. Virtualization means that an application named as hypervisor creates one or more virtual computers, whose simulations can run any software.10 It’s the virtualization technology provides the basic nature of cloud computing: “e-‐mail, Web, or file servers (or anything else) can be conjured up as soon as they’re needed; when the need is gone, they can be wiped from existence, freeing the host computer to run a different virtual machine for another user.”11 With the help of readily-‐developed virtualization technology, cloud computing has been growing in size – a global scale.
8 See Melzer, supra note 1, at 403-‐04.
9 See Jenna Gerber, Head Out of the Clouds: What the United States may Learn From the
European Union’s Treatment of Data in the Cloud, 23 IND. INT’L & COMP. L. REV. 245 (2013);
See also Sourya Biswas, A History of Cloud Computing, CLOUD TWEAKS (Jul 31, 2016),
http://cloudtweaks.com/2011/02/a-‐history-‐of-‐cloud-‐computing/
Virtual Private Networks, WIKIPEDIA.ORG, available at
https://en.wikipedia.org/wiki/Virtual_private_network (VPN is a private network that extends across a public network or internet. It enables users to send and receive data across shared or public networks as if their computing devices were directly connected to the private network.)
10 See Erica Naone, Conjuring Clouds: How Engineers Are Making On-‐Demand Computing a Reality, TECH. REV., Jul.-‐ Aug. (2009), at 54.
However, as to common users of the Internet, the concept of “cloud computing still remain vague.12 The National Institute of Standards and Technology (NIST) defines cloud computing as: “ A model for enabling ubiquitous, convenient, on-‐demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”13 To common people, cloud computing enables users to access to numerous resources, such as remote storage. The users no longer need to prepare infrastructures or supports for such infrastructures in order to obtain such service. According to the NIST definition, the model of cloud computing has five essential characteristics: (1) on-‐demand self-‐service, which allows a consumer to unilaterally provision server time and network storage as needed without requiring human interaction with every service provider; (2) broad network access, which emphasizes the network availability and the ability of users to access the information or service through any platform with a broadband connection, including “mobile phones, laptops, and PDAs;” (3)resource pooling, which means the providers pooled computing resources and to dynamically assign resources by using a multi-‐tenant model based on customers’ demand. The customer has no control or knowledge over the exact location of the provided resources; (4) rapid elasticity,
12 Philip Koehler et al., Cloud Services From a Consumer Perspective 2 (2010), available at
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.174.6121&rep=rep1&type=pdf ( Cloud computing is a “buzzword almost designed to be vague, but…. is more than just a lot of fog.”)
13 Peter Mell & Tim Grance, The NIST Definition of Cloud Computing, NAT’L INST. OF STANDARDS & TECH., INFO. TECH. LAB. available at
which means computing capabilities, can be elastically and automatically be provisioned and released based on consumer’s need; (5) measured service, involving automatic optimization of system resources.14
Based on the needs of end users, the provider’s frame work, and the goal of the service exchange,15 there are three different versions of cloud computing service. The NIST refers them as the three “service model”: Software as a Service (SaaS), Platform as a Service (PaaS),and Infrastructure as a Service (IaaS). 16 These service models are deployed in four ways—as private, community, public, or hybrid cloud.17 All these four may be controlled by a third party provider. A private cloud’s infrastructure is provisioned for use by a single organization, especially for internal use by employees within an organization. On the contrary, a community cloud’s infrastructure is limited to consumers from a group of organizations with same concerns. Then, a public cloud is generally open to the public, for free or with certain payments. A hybrid cloud combines two or more of these deployment models.
As to common users, the most familiar clouds in place nowadays should be public SaaS models. Under this model, Facebook, Yahoo! Mail, YouTube, Twitter and Gmail are all included. Basically, the most common examples of SaaS model is web-‐ based e-‐mail and social networking websites. It should be known that common cloud storage service, such as dropbox, Baidu Cloud Storage, that provides to normal
14 Id.
15 See Keith Jeffery & Burkhard Neidecker-‐Lutz eds , The Future of Cloud Computing:
Opportunities for European Cloud Computing Beyond, European Commission on Information Society and Media (2010) available at
http://cordis.europa.eu/fp7/ict/ssai/docs/executivesummary-‐forweb_en.pdf
16 NIST Definition, supra note 13. 17 Id.
users is also included. The capability of SaaS model provided to the consumer is to use the provider’s applications running on a cloud infrastructure.18 Users of SaaS model do not need to have technology skill since they don’t need to manage or control the infrastructure including networks, servers, operating systems, or storage.19 Users can simply access provided applications with Internet browsers. For instance, an user of Gmail, that provided by Google, does not need to download or install anything on his personal computer.20 He can simply access to Gmail via Internet browser through networks. Users embrace the SaaS model that leads to “rapid development of other cloud-‐based applications, including calendars, contact management, word processing, and digital photo applications.”21
The second model PaaS basically allow programmers to deploy their own applications, “created using programming languages and tools supported by the provider.”22 It can be read into three parts: (1) A PaaS moel provides hardware, operating systems and other tools; (2) users should have modest technological skills; (3) users can develop their own applications through the basic hardware, operating systems and other tools provided by the provider. However, there’s one more element here: programmers only have “limited control over the software so long as it does not interfere with the physical infrastructure of the provider’s network.”23
18 Id. 19 Id.
20 Gmail, WIKIPEDIA.ORG, available at https://en.wikipedia.org/wiki/Gmail (“Gmail is a free,
advertising-‐supported email service provided by Google.”)
21 William Jeremy Robison, Free at What Cost?: Cloud Computing Privacy Under the Stored
Communications Act, 98 GEO. L.J. 1195, 1203 (2010).
22 NIST definition, supra note 13.
23 Shahid Khan, “Apps. Gov”: Assessing Privacy in the Cloud Computing Era, 11 N.C. J.L. & TECH.
For instance, Google App Engine is within the PaaS model. It enable users to build a website application. And Google App Engine is free on certain level and fees are “charged for additional storage, bandwidth, or instance hours required by the application.”24
The third model takes the PaaS model a step further. IaaS model provides users the capability to provision processing, storage, networks, and other fundamental computing resources.25 Users are able to control all the fundamental computing resources, including “operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g. host fire walls).”26 Along with the instance of Gmail, the application of Gmail definitely requires infrastructure such as storage space to store all data or operating system to process all data. The provider of Gmail, Google may choose to interface the Gmail with a provider offering the required infrastructure in the cloud.
The development of Internet had already revolutionized data transmission, which directly challenge the current copyright law since such transmission will not be limited by geographic or time. Users are getting used to enjoy fast online transmission and quality digital copies of copyrighted works. Further, Cloud computing is designed to fully meet consumers’ demand for digital contents in less time, with less effort and pay less money. With the unbelievable data storage technology, cloud computing undoubtedly expands online digital content. Because of the easy process of the three service models, more and more companies are
24 Google App Engine, WIKIPEDIA.ORG, available at
https://en.wikipedia.org/wiki/Google_App_Engine
25 NIST Definition, supra note 13. 26 Id.
getting involved to provide “users’ prefer” cloud computing service. In order to attract more users to gain benefit, they need to provide more contents. Then, users are able to enjoy copyrighted works even not only without preparing infrastructures as before but also without downloading. All users need is a basic device, which is able to get to the Internet. Users may not consider the issue of copyright infringements, all they want are enjoy works. They may be attracted by those cloud-‐based websites that provide more contents. One side need more contents at meanwhile ignoring copyright issue, the other side attempt to attract more users to gain economic benefits by providing more contents. Under such circumstance, there’s no doubt that the issue of copyright infringement become serious. This dissertation latter will analyze how cloud computing effect and cause copyright infringement in details in latter chapter.
Chapter 3: Intermediaries’ Direct Liability of Copyright
Infringements
I. Infringe the Right of Reproduction
The last chapter had already provided technological details of cloud computing service. An analysis of how those details affect the ISPs’ direct copyright liability will be discussed in this chapter.
Under the traditional circumstances, people need to get tangible copies of the copyrighted work before they enjoy it, and such tangible copies are products of the “printing” technology. Copyright owners can gain reasonable interests via distributing the tangible copies of their copyrighted works. Copyright Law is enacted to protect copyright owners’ such interests. However, the “printing” technology keeps developing, that causes uncertainties for copyright owners to gain interests from the tangible copies made via such “printing” technology. As a matter of fact, to protect copyright owners’ interests, the copyright law enacted and amended because of the development of “printing” technology. Therefore, the right of reproduction no doubt is the core of any copyright acts. With the development of technology, people are getting used to reproducing a work on a computer hard drive, a mobile hard disk or a remote hard disk space as an invisible copy. Therefore no more tangible copies are needed. As a consequence, the right of reproduction has been changed to adapt the new technology.27 Then, the cloud computing makes even
27 See White-‐Smith Music Pub. Co. v. Apollo Co., 209 U.S. 1 (1908). (The Supreme court of
U.S. concluded the music rolls were parts of a machine which can produced music tones when properly operated, but were not copies within the meaning of copyright act.) See also Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3rd Cir. 1983).(The 3rd
the invisible copies stored in the hard drive or portable hard disk in computers unnecessary. People are able to have a giant feast of works as novels, TV programs, movies, music and others online without downloading any content of these works. All they need is high speed Internet and a simple tablet or cellphone. However, if there’s no tangible or invisible copy, how could the copyright owner control their work via the right of reproduction? So, there is no doubt that the cloud computing technology challenged the core status of the right of reproduction in copyright law area.
In each country, courts make judgments based on their countries’ relevant acts. As for the right of reproduction, all courts have to explain its scope for purpose of determining whether there are infringements of this exclusive right of copyright owners. This makes the scope of the reproduction right significant. Technology is challenging the reproduction right, this situation causes more uncertainties of the scope of the reproduction right. For instance, lots of “temporary copies” that existed in the random access memory of computer are created by users as results of launching a software application, browsing the Internet or doing other activities on a computer. Are such temporary copies fall within the scope of the right of reproduction? Moreover, it’s getting harder to tell whether there is a copy exists when people stream video or audio directly from the cloud, because the “copy” is replaced by new data in a very short time or even do not include the whole work. In order to figure out the contour of the right of reproduction, this dissertation needs to analysis each element of the definition of reproduction, and review landmark Circuit of U.S. concluded that copyright could exist in computer programs expressed in object code –computer operating system and ROM—Read-‐Only Memory Device.)
cases to understand the basic principle behind them. We can only solve the problems arising with the cloud computing in such method only. By analyzing different countries’ understanding of the scope of the reproduction right and the Chinese now existing acts and applications, this section will provide a proposal for China in lining the contour of the right of reproduction.
i.
THE U.S. PART— From the Case Law Relevant to The Right of
Reproduction
This section will start with the right of reproduction in the U.S.. In the U.S. Copyright Act, the reproduction right is an exclusive right granted to copyright owners by the copyright law; they can reproduce a copyrighted work in copies or phonorecords.28 To reproduce a copyrighted work, copyright owners have to fix it in a tangible medium of expression – a copy or a phonorecord—“now known or later developed,” from which it “can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”29
As mentioned above, there’s no doubt that “copy” is the central concept in the copyright system, it remains crucial to both the establishment and infringement of copyright interests.30 Although we’ve already known the definition of “copies,”31 it remains inevitable to an analysis of the elements of reproduction right and a review
28 See 17 U.S.C. §106(1). 29 See 17 U.S.C. §102(a) & 101.
30 Aaron K. Perzanowski, Fixing RAM Copies, Faculty Publication, Paper 46, at 2 (2010),
http://scholarlycommons.law.case.edu/cgi/viewcontent.cgi?article=1045&context=faculty_ publications
31 17 U.S.C. § 101.( “Copies, material objects, …fixed…”; “ a work is fixed in a tangible
medium of expression when its embodiment in a copy… by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”)
the case law. Because the contours of these elements are still unclear that need to be defined. For instance, a defendant does not infringe the copyright law if he/she has not reproduced the copyrighted work in fixed form.32 But what is a “fixed form”? This fixation requirement contains two elements: embodiment requirement and duration requirement according to 2nd circuit in Cablevision II case.33 Between these two elements, the contour of duration requirement stay indistinct, which constantly causes legal uncertainty in deciding whether there’s a copyright infringement or not, especially towards identifying “temporary copies.”
In order to understand how the US courts deal with the temporary reproductions issue under the Copyright Act, we shall look back into the former cases to clarify the existed relevant rules and locate the relevant principles. The following sections will analyze this issue base on a timeline.
A. Before the RAM Copy Doctrine: Elektra v. Gem34, Basic Book v. Kinko’s35 AND Priceton University v. Michigan Document Service36
These three cases happened before the RAM copies appeared. But the U.S. courts’ attitude towards the issues caused by new reproduction technology could be implied from them.
In the Elektra case, Defendant provided supplies as bland and pre-‐recorded tapes and cartridges but also a new electronic invention, the “Make-‐A-‐Tape” system – which allowed users to duplicate tapes in 2 minutes by coins. Although the
32 MARSHALL A.LEAFFER, UNDERSTANDING COPYRIGHT LAW 48 (5th ed. 2010).
33 Cartoon Network, L.P. v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). [hereinafter
Cablevision II]
34 Elektra v. Gem 360 F. Supp. 821 (E.D.N.Y. 1973). 35 Kinko’s 758 F. Supp. 1522 (S.D.N.Y. 1991).
defendant’s employees did not perform in the actual copying, and they insisted the “Make-‐A-‐Tape” system had the nature of “individual and self-‐service,” which should be treated same as photocopiers in a public library,37 the court disagreed with this comparison for 3 reasons: (1) Make-‐A-‐Tape system duplicated the entire tapes instead of “a part” of the tape; (2) Make-‐A-‐Tape system allowed users to duplicate the entire tapes in less time and less cost than the original;(3) “The duplicated tape is a true copy essentially identical and equally desirable.”38 All in all, the court ruled that the defendant held direct liability because it gained financial profits from the infringements. The development of “reproduce” technology began to affect the court’s judgment. Due to the convenience and quality of this new technology, the court completely ignore the “volitional conduct,” and held the shop provide equipment directly liable for copyright infringement.39
Then come the Kinko and Priceton case, in both of these two cases, the defendants reproduced the copyrighted materials without copyright owners’ permissions, then they bund the copied materials up, sold them as “coursepacks” to students for financial profit. The students who bought the coursepacks use them as class reading assignments. Both the Southern District court of New York and the 6th Circuit held that the defendants directly liable for the copyright infringements, fair use doctrine could not be granted because the defendants did use the infringing materials for a commercial purpose and would effect the potential market. As we
37 Elektra v. Gem, supra note 34 , at 824. 38 Id.
39 Volitional Conduct, WIKIA, http://itlaw.wikia.com/wiki/Volitional_conduct_doctrine . (“To
be liable for direct copyright infringement, a person must have committed some voluntary act that caused the infringement to occur.” This dissertation will further analyze this volitional conduct in the Netcom Case.)
will discuss later, the EU directives use the condition of “economic benefits” in deciding whether temporary copies fall within the scope of the right of reproduction. But although the US court brought into consideration here in these two cases, they further ignored the condition of economic benefits totally in the future cases.
B. MAI v. Peak40 --- the RAM Copy Doctrine
Unlike the above-‐mentioned precedents, cases thereafter are all about a doctrine still playing an important role even nowadays. That is the RAM doctrine. RAM is the abbreviation for Random-‐access memory (RAM), which is a form of computer data storage that allows data items to be read and written in approximately the same time when users access data items in computers.41 A computer operates by reading information stored from permanent storage (as hard disk), then translating it into electrical pulses in RAM, and finally transferring it to the CPU, which actually performs the calculations and answers. 42 This means whenever a user wants to view a picture or read a PDF file on a computer, read a novel on a Kindle device or listen to a song on an iPod, a copy of the file will be placed in temporary storage— RAM. But the RAM will not keep the copy forever, the former copy in it will soon be replaced by new data and all data will be erased when the computer is turned off.43 Then, the question arises: should we consider the copy temporarily stored in the RAM as an ordinary copy?
40 MAI Systems Corp. v. Peak Computer Inc. 991 F.2d 511 (9th Cir. 1993) [hereinafter MAI v.
Peak].
41 Random-‐access memory, WIKIPEDIA.ORG, available at
http://en.wikipedia.org/wiki/Random-‐access_memory
42 See Apply computer, Inc v. Franklin Computer, 545 F. Supp. 812, 813 (E.D. Pa. 1982). 43 Leaffer, supra note 32, at 306.
The 9th Circuit and other courts gave us an answer: yes, the data temporarily stored in RAM qualifies a “copy,” because the data is “fixed” in the RAM.44 In MAI v. Peak case, the defendant had to run the plaintiff’s built-‐in operating system software to do the repair and maintenance process. According to the 9th Circuit, this caused a “copy” automatically be transferred from the hard drive to the RAM. The 9th Circuit’s ruling based on two reasons: (1) it’s a general rule that “loading of software into a computer constitute the creation of copy;” and (2) the copy created in the RAM can be “perceived, reproduced, or otherwise communicated.”45
Although the 9th Circuit’s decision (the Ram Copy Doctrine) had been followed by lower courts for almost 15 years without challenges46 and had been
44 MAI v. Peak, supra note 40. See also Stenograph v. Bassard case; Sony Computer v.
Connectix Corp case. But some courts reject the rule that temporary storage in RAM qualifies a reproduction. See Hogan v. Cybersource.
45 17 U.S.C. §101. See also MAI v. Peak, supra note 40, at 520.
46 Zohar Efroni , The Cartoon Network v. CSC Holdings & Cablevision Systems, , (2008)
http://cyberlaw.stanford.edu/blog/2008/08/cartoon-‐network-‐v-‐csc-‐holdings-‐cablevision-‐ systems (last visited March, 2015); See generally Advanced Computer Services of Michigan, Inc. v. MAI Sys. Corp., 845 F. Supp. 356, 363 (E.D. Va. 1994).(observing that “ the Act does not require absolute permanence for the creation of a copy”); Stenograph L.L.C. v. Bossard Assocs., Inc., 144 F.3d 96, 101-‐02 (D.C. Cir. 1998) (citing MAI v. Peak as “RAM reproduction constitutes a copy);NLFC, INC. v. Devcom Mid-‐America, Inc., 45 F.3d 23 231, 235 (7th Cir.
1995)(stating “the act of loading a program… into a computer’s memory creates a copy of the program”); Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330, 1333-‐34 (9th Cir.
1995)(reiterating Peak’s holding and holding that electronic representations of digital signals on a memory component that lasted for a millisecond are fixed); Tiffany Design, Inc. v. Reno-‐Tahoe Specialty, Inc., 55. F. Supp 2d 1113, 1120-‐21 (D. Nev. 1999)(relying on Peak in holding that the scanning of a copyrighted image into RAM constituted a reproduction); Sega Enters. v. MAPHIA 948 F. Supp. 923 931 (N.D. Cal. 1996)(citing Peak as
“copying…occur when a computer program is transferred from a permanent storage device to a computer’s random access memory”); Stenograph L.L.C. v Bossard Assocs., 144 F 3d 96 (D.C. Cir. 1998)(holding that an infringing copy of a computer was make when that program was loaded into RAM); Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737, 745 (D. Md. 2003)( “Unauthorized electronic transmission of copyrighted text, from the memory of one computer into the memory of another, creats an infringing ‘copy’ under the Copyright Act.”); Ticketmaster L.L.C. v. RMG Technologies, Inc., 507 F. Supp. 2d 1096 (C.D. Cal. 2007)( The court decided that upon viewing of webpages, the copies of webpages
endorsed by the Government’s NII White Paper Report as settled law,47 there are still many critics. As mentioned by Professor Leaffer, these critics can be grouped into two categories: (1) MAI decision was �
